US Dollar (USD) weakness moved the New Zealand Dollar (NZD) to 0.5980 midweek before reversing profits to 0.5900 levels. The Federal Reserve held their cash rate at 5.50% with prospects of another hike later this year as the economy expands at a decent pace. Recent months of positive incoming data has the Fed on high inflation alert. New Zealand grew by a staggering 0.9% in the quarter ending June 2023 yanking the economy out of a technical recession after stalling in the last 2 quarters. The RBNZ will now have work to do determining if they will need to raise rates again to deflate the economy if they deem it to be running above capacity. They will be concerned around rising inflation and wage growth. Forecasts are still for a slow recovery in 2024 and 2025 before things return to normal in late 2025. We expect the kiwi to remain under pressure over the next week.
The current interbank midrate is: NZDUSD 0.5919
The interbank range this week has been: NZDUSD 0.5894- 0.5985